I make 40,000 per year. I have basically no debt. My dti is 4.5% per month. I like in an area where home prices are cheap. I really want to buy a house for about 125,000. The payments with taxes and insurance will be around 950 per month, assuming I put 10% down, which I am going to do. I am in a prestigious job, so I expect my income to increase rapidly. What would you do if you were me? Should I buy the house? I will still have 7,000 in my emergency fund after the down payment and clsong costs, and approximately a 600 dollar cushion per month after all my budgeted expenses. I have heard all the rules about buying a house that is 2.5 times my income, but I think it might be wise to stretch a bit right now. Keep in mind the house I can get for 125,00 is 3 bed/2 bath/2 car garage, good neighborhood.......give me some advice????
2007-02-13 13:41:28 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
well you have to look what the market trend is in the area, is the market kind of flat (like most areas) and the houses value will increase enough if you do need to do a quick sell? are you sure your job / company is stable? I know quite a few people that had prestigious jobs that are now living in apartments scanning groceries. If you think everything will stay stable enough in your life that you will have enough time to build the equity you need in case you need to sell then go for it, sounds like a nice house. I can tell that you are not in my area of the country......anything that price is in need of major repair so good for you!!
2007-02-13 13:49:48 · answer #1 · answered by irish eyes 5 · 1⤊ 0⤋
It would sound as if you have thought this through. It would seem you will still have a decent amount of money left over each month, so that is a good cushion should something come up in any one month. I would probably buy the house, especially with the expected increase in income.
2007-02-13 21:47:43 · answer #2 · answered by rosekm 3 · 0⤊ 0⤋
First, find out what a bank or mortgage company will lend you for a house (pre-qualifying). Go from there as to how much of that you want to borrow.
What will you use the house for? Just yourself? Entertaining business contacts? Do you have a spouse and children? I would not go to far over what you need at this point. If you are not married or have children now, and it isn't in the immediate future, you can always buy bigger later. As a single person (which is how your question reads), entertaining is more your priority now.
2007-02-13 21:48:27 · answer #3 · answered by Brian G 6 · 0⤊ 0⤋
SOunds like you have a good finacial plan going there. I say make sure to really check out every house that is available to make sure you get the best one. You want the profit of the house to increase through the years not depriciate.
2007-02-13 21:47:18 · answer #4 · answered by Amber D 3 · 0⤊ 0⤋
Buy what you can comfortably afford. The biggest mistake people make is not leaving themselves enough money after the house payment every month.
What happens if you get sick? Or want to take a holiday?
Be cautious.
2007-02-13 21:46:40 · answer #5 · answered by ? 6 · 0⤊ 0⤋
Before you buy your house.
Read these two books
Rich Dad Poor Dad
and Cash flow
author Robert Kiyosaki
2007-02-13 21:51:35 · answer #6 · answered by analee 4 · 0⤊ 1⤋